Phone chips need to sip power instead of guzzle it, and even Intel's energy-efficient designs are criticized as too power-hungry for today's smart phones. Phone makers need to make awkward contortions, such as building bigger devices, to accommodate the need for a bigger battery - which most are loath to do.

With an annual research-and-development budget of nearly $6 billion, Intel is equipped to pour incredible resources into essentially any chip project it chooses. After its exit from the mobile-phone chip market in 2006, it focused on other types of communications technologies. Buying its way back into the market is the fastest way for the company to make up for lost time.

David Perlmutter, an Intel executive vice president, said in an interview with The Associated Press that the decision to sell the mobile-chip business in 2006 was "the right decision at the time," and that Intel is buying a more complete lineup of technologies from Infineon than those available in the business it sold.

"I hope that we've learned our lessons and that we're way more focused," he said.

With Infineon, Intel would become the fifth-biggest supplier of mobile-phone processors if the deal closes as expected in the first quarter of next year.

It would get a running start in a market dominated by Qualcomm Inc., Texas Instruments Inc. and STMicroelectronics, which together own about half the total market for processors and other communications chips for cell phones, according to Gartner Inc.

Still, Intel would be a small player: the Infineon division owns only about 5 percent of the market.

Analyst Tristan Gerra with Robert W. Baird & Co. warned that the deal might be "too little, too late" for Intel's push into smart phones, and he said that Intel will have to invest heavily to keep Infineon's products competitive with the rollout of the next-generation cellular networks known as 4G.

One of the reasons that Intel's earlier mobile push failed is that it faced entrenched competitors that already had deep relationships with makers of cell phones. Those rivals also had significant investments in research and development in the area. Gerra and other analysts say Infineon is already at risk of losing its business with Apple because of more competitive products from rivals.

Gerra added that the mobile-phone business moves faster than the PC business.

"Whether a PC company such as Intel can move nimbly given more rapid new product cycles within the mobile-phone industry remains a significant question mark," he said.